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Is the shutdown leaving you in debt? Look at your options

If you are a federal worker in or around Tampa and are furloughed right now — or worse, working without pay — you may be struggling mightily to make ends meet. You might not be fortunate enough to have an emergency stash of cash to meet your basic needs and pay the bills.

When your financial security is at risk, it is very unsettling, even for those who have somewhat of a cushion. But you may have some options to make it through the worst of it, including:

  • Cutting way back on expenses like Netflix and Amazon Prime
  • Joining the gig economy on a part-time basis
  • Getting loans from family, friends or your synagogue or church

It’s generally not a good idea to take on debt in uncertain times, but if your credit is good enough to qualify you for a low-interest rate credit card, this might be a good option.

Some lenders are responding to the crisis by offering low-interest, short-term loans to help furloughed workers until they resume being paid.

If you were already hovering on the brink of bankruptcy, however, your options may be severely curtailed. Debtors sometimes shun filing for bankruptcy because they worry that they will lose their property, vehicles and homes. While that can be true with a Chapter 7 bankruptcy filing, such is not the case when filing for Chapter 13.

While the former wipes the debtor’s financial slate clean, the latter reorganizes the debt to a manageable load. Debtors make regular payments for either a three- or five-year period. At the end of that time, the courts typically discharge the remaining debt as long as the debtor honored the repayment agreement.